CARE has revised rating for Gammon Infrastructure Projects’ short and long term bank facilities, aggregating to worth of Rs 5 crore and Rs 500 crore, from ‘A1’ to ‘ A2+’ and ‘A+/A1’ to ‘A+/ A2+’ respectively. Further, the credit rating agency has revised rating for company’s Rs 100 crore Proposed Non-Convertible Debentures (NCDs) from ‘A+’ to ‘A’.
The revision in the ratings factors the weakening credit profile of Gammon India (GIL)- promoter company, increased project implementation risk with addition of large projects to the portfolio and consequent high investment commitments and corporate guarantees extended by Gammon Infrastructure Projects (GIPL) to these long gestation projects, particularly relative to the current base of operations, elevated gearing on a consolidated basis, delay in project execution of Indira Container Terminals (ICTPL) and consequent financial support required from GIPL and subdued economic outlook.
GIPL is an infrastructure project development company, promoted by GIL, one of the largest construction companies in India. GIPL undertakes the development of infrastructure projects on a public-private partnership basis, having presence in project development, project advisory and sector-specific operations and maintenance.